On this page
» E-lodgement of returns
» Royalty and returns
» Royalty rates
» Reduced royalty for new mines
» Royalty payments by councils
» Extractive minerals
» Reporting sales values for extractive minerals
» Mining return data confidentiality
» Royalty assessment principles
» Prescribed costs (allowable deductions)
» Designated mining operators and monthly royalty payments
» Payment of royalties
» Late or non-lodgement of a mining return
» Penalty for unpaid royalty
» Royalty compliance
Royalty and returns
Electronic royalty returns are submitted via Tenement Returns e-Lodgement (TReL). An instruction document is available to assist TReL users with their submissions. Paper returns (Form 26) are only available on request, or via download from the Forms and fees page. If you wish to opt out of TReL please contact the Resource Royalties Team to discuss.
|Reporting period||Return and royalties due|
|1 January to 30 June||31 July of that year|
|1 July to 31 December||31 Jan of the next year|
|Mineral type||Applicable royalty rate|
|Refined mineral products||3.5% of the value of the mineral|
|Mineral ores and concentrates||5% of the value of the mineral|
|Industrial minerals||3.5% of the value of the mineral|
|Extractive minerals||52 cents per tonne (as prescribed in the Mining Regulations)|
Additional information regarding the calculation of royalty for specific minerals can be found in the South Australian Government Gazette published on 30 June 2011 (PDF 15 KB) which declares the types of mineral ores and concentrates, refined mineral products and both industrial and construction materials.
Specific provisions relating to the calculation of royalty for the production of salt can be found in South Australian Government Gazette published on 28 August 2014 (PDF 395 KB)
Section 17A of the Mining Act 1971 provides for a reduction in the rate of royalty. Application must be made on Form 32 to the Treasurer and must include all relevant information to allow for proper assessment.
The declaration of a new mine applies for a period of 5 years. The reduced royalty commences from the date the first royalty is due and payable. The reduced royalty rate will apply for a maximum period of 10 consecutive 6-month returns.
The reduced royalty for a new mine is currently set at a rate of 2.0% of the value of the mineral.
Declarations made prior to 1 July 2011 continue to be subject to the reduced rate of 1.5% applicable at that time.
The reduced royalty rate for new mines is not available for extractive mineral production.
The 2018 State Budget announced the discontinuation of the Reduced Royalty for New Mines from 1 July 2020. No new applications will be accepted after this date.
Any mines approved prior to this date will continue to be eligible for the concession for up to five years after 1 July 2020 or 30 June 2026 (whichever comes first).
Royalty payments by councils
In the 2018–19 State Budget the Treasurer announced that from 1 July 2019 councils will no longer be required to pay royalty on minerals recovered from borrow pits for their council operations. Consequently, the June 2019 return submission, due 31 July 2019, is the final return lodgement imposing that royalty requirement. Councils will still be required to submit mining returns reporting the quantities of minerals recovered from borrow pits and providing an estimated market value for those minerals. This data is used for statistical reporting purposes.
Royalty will continue to be payable by councils on the minerals recovered from mineral land pursuant to the Mining Act 1971.
The Mining Act 1971 defines extractive minerals as:
'sand, gravel, stone, shell, shale or clay, but does not include:
- any such minerals that are mined for a prescribed purpose; or
- fire clay, bentonite or kaolin'.
A portion of the extractive royalty collected is allocated to the Extractive Areas Rehabilitation Fund (EARF) for rehabilitation projects on extractive mineral mine sites. Further details on how to apply to the fund are available on the EARF web page.
Part 1 of the Mining Regulations 2011 provides guidance as to minerals mined for prescribed purposes that are excluded from the definition of extractive minerals:
- (a) chemical, cement, lime and glass manufacture
- (b) metallurgical flux, refractories and industrial fillers
- (c) foundries, fertiliser, agricultural, jewellery and crafted ornamental uses
- (d) any purposes connected with the production of dimension stone.
Dimension stone is defined in the Mining Regulations 2011 as:
'stone that is quarried in regular blocks and cut, trimmed and finished to specific dimensions and shapes and includes cut stone, ashlars, monumental stone, roofing slate and flagging stone'.
Any mineral used for a prescribed purpose is subject to the applicable mineral royalty rate. Prescribed costs (allowable deductions) may be applicable in determining the market value of these minerals.
While your return is a mechanism for calculating royalty and reporting production, information contained in your returns also provides a valuable snapshot of the extractive industry and its contribution to the state. The data collected is also used to measure the economic value of minerals within South Australia, in addition it provides an insight as to the remaining resources available. As such the reporting of production sales values is a vital component of your return.
Accordingly, tenement holders, proprietors of private mines and district councils are requested to provide a total sales values in their return which appropriately reflect the market value of the minerals recovered in the period (i.e. what they would have cost to be purchased from another local quarry).
Royalty returns require disclosure of a total sales value for the extractive minerals recovered in the period, not a per tonne value.
Mining returns are an important part of your obligations under the Mining Act 1971, however the Department recognises that some of the information required in returns may be considered commercially sensitive. Rest assured that the data provided to the Department in royalty returns remains confidential and cannot be released without your permission, or under certain circumstances with the consent of the Treasurer.
Production and sales related information is periodically made available to the public in statistical reports. That information is sourced from collated royalty return information over the relevant reporting period so as to maintain confidentiality.
Examples of the data released by the Department can be found on the Resource production statistics page.
In determining the correct value of the mineral for royalty purposes you must apply the royalty assessment principles as outlined in section 17(5) of the Mining Act 1971. In addition the market value of the minerals must be ascertained through the application of sections 17(6) to 17(8) of the Act.
To assist in the determination of the market value refer to the South Australian Government Gazette notice published on 12 July 2012 (PDF 108 KB)
Where the mineral has not been sold to a genuine arms-length purchaser, section 17(6)(c) of the Mining Act 1971 applies in the calculation of the value of the mineral. The determined period to be used is within the relevant 6-month royalty return period.
Section 17(8) of the Mining Act 1971 provides for the exclusion of prescribed costs from the market value of minerals in the calculation of royalty. Regulation 8 of the Mining Regulations 2011 provides the following types of costs that may be excluded from the market value of particular minerals:
- Costs (excluding GST) genuinely incurred in transporting the minerals from the relevant tenement to a point of sale (including, for example, packaging, storage, loading, permit, fees and insurance costs)
- Costs genuinely (excluding GST) incurred in shipping the minerals to a genuine purchaser in a sale at arms-length
- Any other costs (excluding GST) determined by the Minister to be a cost of a prescribed kind for the purposes of that section
The Mining Act 1971 requires royalty payers with an annual royalty liability greater than $100,000 to make monthly royalty payments. In March each year the Treasurer issues a Notice of Designation and Notice of Assessment for all royalty payers subject to this provision.
If a Designated Mining Operator expects a royalty variation of more than 10% they should contact the Resource Royalties Team to have their notice varied or amended.
Payment of royalties
Royalty payments can be made by cheque made payable to the Department for Energy and Mining, or by direct bank transfer to:
The Commonwealth Bank of Australia
|Account number:||1002 2561|
|Account name:||Department for Energy and Mining - Collections|
Email: DEM.Royalty@sa.gov.au |
Please forward remittance advice
|ABN:||83 768 683 934|
For more information on Mineral Royalties in South Australia contact:
The Resource Royalties team
Phone: +61 8 8429 2512
Returns not submitted by the due date will be subject to an Administration Fee as outlined in the Mining Regulations 2011.
When royalty has not been paid by the due date, penalties may be applied (in addition to an administrative fee) under either section 17E or section 73E of the Mining Act 1971.
The Resource Royalty Team uses risk evaluation techniques to identify and monitor compliance with the Mining Act 1971 and Mining Regulations 2011.
It aims to ensure that tenement holders, proprietors of private mines and district councils pay the correct amount of royalty and have retained the records required to substantiate their royalty calculations(s).
The team's compliance philosophy is based on:
- Obtaining a maximum level of voluntary compliance
- Tenement holders, proprietors of private mines and district councils having a clear understanding of their obligations
- Identifying risk areas for pro-active investigation
- Applying the appropriate treatment for non-compliance
- Treating tenement holders, proprietors of private mines and district councils in a fair and equitable manner
This information is provided to help you understand the audit process and answer some questions you may have. It also provides you with some details of your rights and obligations relating to audits.
Audits are selected in a variety of ways:
* Projects designed to target specific problems or issues in legislation
* Industry trend analysis
* Tip offs
* Follow-up of information received from a variety of sources
* Random selection for the routine verification and coverage of the royalty revenue base
The Resource Royalties Team anticipates that all tenement holders will be audited at least once every 4 years.
In most cases an auditor will:
* Write, telephone or visit you to let you know that an audit will be conducted
* Explain the process and the scope of the audit
* Specify the records to be produced
* Give you a reasonable period to assemble those records for either submission for desk audit or arranging a time and place to interview you or a representative
* Confirm arrangements in writing
The field audits will be conducted by authorised officers appointed pursuant to section 14 of the Mining Act 1971.
During an audit, the auditor will conduct interviews and make enquiries to establish compliance with the particular legislation and examine and test some of your internal financial records.
You will receive written advice of the outcome of the audit and any proposed action.
You should ensure that the records the investigator has requested are ready for examination. If you require further time to collate the records, please inform the investigator prior to the commencement of the audit.
How long an audit takes depends to a large extent on what type of audit - full audit, interim audit, theme audit or spot check - is undertaken.
If you have any questions about the arrangements for the audit or the processes involved, contact the auditor for assistance.
Investigators have a range of powers. In general, these powers permit the investigator to:
* Gain access to buildings and property and remain there
* Inspect, examine and copy any documents or records
* Require a person to answer questions and provide information
* Require a person to take reasonable steps to obtain information relevant to the investigation and to pass it on to the authorised officer. A full list of authorised officer powers can be found under section 14 of the Mining Act 1971.
If a tenement holder fails to comply with an investigator's lawful requests, it is possible that penalties such as a fine can be applied.
During an audit, you are obliged to provide:
* The investigator reasonable assistance and facilities
* Complete and honest answers and explanations to questions
* Prompt, full and free access to all relevant information, records, documents, data and systems as required
If an audit is to be conducted, you have the right to:
* Ask to reasonable time to produce your records
* Negotiate the time and place for the investigation with the investigator
* Receive written confirmation of these arrangements
During an audit, you have the right to:
* Sight the investigator's identification and authority
* Expect the investigator to be professional and courteous
* Involve your professional representative in the process
* Ask how long the investigation is likely to take
* Expect your affairs to be treated with strict confidentiality
* Be given the opportunity to explain the reasons for any irregularities, discrepancies, decisions etc
At the end of the audit, you have the right to:
* Receive an explanation of the results or findings
* Ask the investigator how an assessment of royalty payable has been applied
* Ask for advice about the objection and appeal process
* Discuss any aspect of your case with the investigator and/or their manager
If you are dissatisfied with certain decisions or an assessment you are entitled to appeal against the assessment to the Environment, Resources and Development (ERD) Court. After receiving an assessment, you have one month to lodge an appeal to the ERD Court.
Information gathered during audit is treated in the strictest confidence and will not be used or divulged except for purposes required by law.
For more information, contact:
Phone: +61 (8) 8429 2512